MUMBAI: Hindustan Petroleum Corporation plans to invest Rs 61,000 crore in five years ending 2022 to scale up its refining and marketing operations.

The state-run oil marketing company plans to invest Rs 7,110 crore this fiscal against Rs 5,860 crore in FY17, its chairman Mukesh Surana has said.

“With huge potential of growth amidst rising energy demand in country and due to low per capita consumption base, oil and gas sector is poised for an exciting and challenging future,” Surana said. “We are adapting to this changing energy mix and are well positioned to create value for all the stakeholders in the future business environment with a capex of over Rs 61,000 crore over five years’ period,” he said.

“HPCL is focused on enhancing the refinery foot print to increase self-sufficiency, diversify into the profitable segment of petrochemicals, strengthen and expand the core business of refining and marketing and create presence in the future business line of natural gas for achieving growth and superior financial performance,” said Surana who is also the managing director of the firm.

Earlier this year, the government approved merger of HPCL with state-run oil explorer ONGC. While the government has indicated that HPCL will become a subsidiary of ONGC and would continue to be listed on the bourses separately, other details are yet to be finalised.

“Assuming the ONGC and HPCL integration happens, there is a thinking that, logically, the downstream operations would be consolidated in HPCL,” Surana said. “There is a reasonable possibility of MRPL (Mangalore Refinery and Petrochemicals) getting along with HPCL, but we are yet to start the discussions,” he said.

MRPL is a subsidiary of ONGC and HPCL owns 16% stake in the refinery. A potential merger with HPCL will give MRPL access to its fuel retail network, and help HPCL reduce the gap between output from its refinery and sale from its retail network.

In 2016-17, HPCL’s refineries’ throughput was 17.8 million tonnes while the company sold 35.2 million tonnes through its marketing network.

On its own, HPCL is expanding its refining capacity to reduce the gap. It is modernising its Visakh refinery and expanding the capacity of its Mumbai refinery. In a joint venture with the Rajasthan government, it has started work to set up a 9 million tonne per annum refinery, which is likely to be completed in five years.

Surana said state-run oil marketing firms HPCL, IOC and BPCL have already formed a joint venture company to set up a mega $40-billion refinery on the western coast of the country. The refinery-cum-petrochemicals unit with a capacity of 60 million tonne a year will be located at Babulwadi in Maharashtra.